#Featured: Impact Voices
Enterprise-level impact data can get impact investment to the big leagues. “Early-movers in impact investing used to try to coax people into the pool by saying, ‘Come on in, the water’s fine,” writes Clara Miller, president of the F.B. Heron Foundation, in a new essay on ImpactAlpha. “Now, immense players are doing cannonballs off the high dive, and there’s no lifeguard.”
No wonder early-movers are nervous! But in Miller’s view, current doctrine and battles around impact measurement and metrics may be undermining the vision of capital market transformation that unites the field. Rather than focusing on the “additionality”, “attribution” and “intentionality” of the impact investor, says Miller, better to measure the overall effect that enterprises have. “Without appropriate enterprise-level data standards, the potential for impact investing to contribute to market integrity for investors, learning for managers, and economic transformation globally will be lost.” Miller lays out a half-dozen guideposts for driving integrity, transparency and real performance.
Read, “Transforming the capital markets with impact rigor and disclosure” by Clara Miller, president of the F.B. Heron Foundation.
Big League: Transforming the capital markets with impact rigor and disclosure
#Dealflow: Follow the Money
Sustainable cellphone maker Fairphone raises $7.7 million. The Dutch “responsible electronics” startup launched four years ago, selling a modular cellphone handset made with sustainably sourced minerals, and funded through crowdsourcing. The latest round is backed by Pymwymic Impact Investing Cooperative and DOEN Participaties, the investment arm of the Dutch DOEN Foundation. The funds will be used for material sourcing, production, distribution, recycling and improving its product longevity. Since its launch, Fairphone has sold 135,000 handsets, and has ambitions to influence the full electronics sector. “There is very little set up by the industry for sustainable production in its current state,” says co-founder Bas van Abel.
Startup Oasis seeds six Indian startups. The Jaipur-based incubator is backing the ventures with 17 million rupees ($260,000) through its “Invent” program. Recipients are committed to developing technologies and services for India’s poor. They include: KBSS, a skills training services for nonprofit and government workers; Multibhashi, a language-learning app; and Carmel Organics, which supports small-scale farmers organically growing medicinal herbs and spices. The goal of the “Invent” program, led by Villgro with funding from U.K. development agency DFID, is to back social startups outside India’s well known tech and entrepreneurship hubs, like Bangalore. It is targeting eight low-income Indian states: Uttar Pradesh, Madhya Pradesh, Bihar, Chhattisgarh, Jharkhand, Rajasthan, Orissa and West Bengal.
People on the move. Rich Mauro is director of capital markets at Wunder Capital, a solar fund manager in in Boulder, Co. Mauro previously was a VP in the infrastructure and energy group at Deutsche Bank. Story Bellows joined urban-planning firm civic planning firm CityFi as a principal. Daniel von Moltke is a managing partner at Swiss impact investment management firm Quadia.
See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].
#Signals: Ahead of the Curve
New Urban-X cohort showcases startups using AI to reengineer cities.The arrival of the third cohort from Urban-X, a partnership between the venture fund Urban Us and BMW-Mini, provides a useful counter to the doomsday narrative around artificial intelligence. Many of the startups are using AI to make life in cities safer and more efficient. Roadbotics, from Pittsburgh, uses AI and computer vision to monitor and manage roadways. Versatile Natures, from Tel Aviv, uses AI technology to improve the safety and efficiency of construction sites. Qucit, based in Bègles, France, leverages AI to help cities and businesses speed up services like emergency response and road assistance. The ventures were among nine selected from a pool of 300 applications around the world. Seven of the nine teams have a female founder and three firms are based outside the U.S. The accelerator looks for startups using technology to solve urban challenges in transportation, planning, service delivery, energy efficiency and construction. “The real scorecard is can we create impact while creating returns,” Urban.us’s Stonly Baptiste told ImpactAlpha’s Roodgally Senatus. Check out the rest of the Urban-X cohort, and read Roodgally’s report from Urban-X’s Brooklyn headquarters, on ImpactAlpha.
Urban-X aims to accelerate startups using AI to reengineer cities
#2030: Long-termism
The next billion air conditioners could cool, or fry, the planet. Deadly heat waves are becoming more frequent and more severe, as we reported yesterday. The best way to protect against heat-related deaths is well known: more air conditioning. AC “can mean the difference between life and death,” says Michael Greenstone, director of the University of Chicago’s Energy Policy Institute.
The world is on track to add 700 million new ACs by 2030, and 1.6 billion by 2050, as China, India, Brazil and Indonesia crank up their use of air conditioners, says a 2105 paper published by the Lawrence Berkeley Lab. While this might help reduce heat deaths, it is projected to contribute to nearly a full degree Fahrenheit of atmospheric warming over the coming century. Today’s units cool by using hydrofluorocarbons (HFCs), which were adopted in the 1990s to replace an earlier coolant that was depleting the ozone layer. Turns out HFCs are potent greenhouse gases, up to 9000 times more powerful than carbon dioxide. There’s been a 258 percent increase in HFC emissions since 1990, according to the EPA.
The solution: a rapid switch to highly efficient air conditioners using refrigerants that don’t contribute so much to global warming. That could avoid the equivalent of as much as 25 billion tons of CO2 in 2030, 33 billion tons in 2040, and 40 billion tons by 2050, the Berkeley Lab paper estimates. The Kigali Amendment to the Montreal protocol that phased out the earlier coolant reflects growing global concern over HFCs and highlights progress being made to develop refrigerants with low global-warming potential.
What about the existing stock of ACs? Taking a page from the carbon markets, the Kigali conference set up a kind of cap-and-trade system. Companies the rely on refrigeration and air conditioning can buy credits that help make recycled HFCs cost-competitive with virgin sources. Such an approach succeeded in phasing out the earlier coolant with ozone-destruction offsets that put a value on the coolants “and created an incentive for technicians and contractors who collected and destroyed them at unprecedented rates,” according to Natural Capital Partners.
